Fifth Third Bank 2012 Annual Report Download - page 15

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2012 ANNUAL REPORT
FINANCIAL CONTENTS
Glossary of Terms 14
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Selected Financial Data 15
Overview 16
Non-GAAP Financial Measures 20
Recent Accounting Standards 22
Critical Accounting Policies 22
Risk Factors 26
Statements of Income Analysis 35
Business Segment Review 42
Fourth Quarter Review 49
Balance Sheet Analysis 51
Risk Management 56
Off-Balance Sheet Arrangements 79
Contractual Obligations and Other Commitments 80
Management’s Assessment as to the Effectiveness of Internal Control over Financial Reporting 81
Reports of Independent Registered Public Accounting Firm 82
Financial Statements
Consolidated Balance Sheets 83
Consolidated Statements of Income 84
Consolidated Statements of Comprehensive Income 85
Consolidated Statements of Changes in Equity 86
Consolidated Statements of Cash Flows 87
Notes to Consolidated Financial Statements
Summary of Significant Accounting and Reporting Policies 88 Commitments, Contingent Liabilities and Guarantees 125
Supplemental Cash Flow Information 95 Legal and Regulatory Proceedings 129
Restrictions on Cash and Dividends 95 Related Party Transactions 131
Securities 96 Income Taxes 132
Loans and Leases 98 Retirement and Benefit Plans 134
Credit Quality and the Allowance for Loan and Lease Losses 99 Accumulated Other Comprehensive Income 138
Bank Premises and Equipment 108 Common, Preferred and Treasury Stock 139
Goodwill 108 Stock-Based Compensation 140
Intangible Assets 109 Other Noninterest Income and Other Noninterest Expense 144
Variable Interest Entities 110 Earnings Per Share 145
Sales of Residential Mortgage Receivables and MSRs 113 Fair Value Measurements 146
Derivative Financial Instruments 115 Certain Regulatory Requirements and Capital Ratios 155
Other Assets 120 Parent Company Financial Statements 156
Short-Term Borrowings 121 Business Segments 158
Long-Term Debt 122 Subsequent Event 162
Annual Report on Form 10-K 163
Consolidated Ten Year Comparison 178
Directors and Officers 179
Corporate Information
FORWARD-LOOKING STATEMENTS
This report contains statements that we believe are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Rule 175 promulgated thereunder, and Section
21E of the Securities Exchange Act of 1934, as amended, and Rule 3b-6 promulgated thereunder. These statements relate to our financial condition, results of operations, plans, objectives, future performance or
business. They usually can be identified by the use of forward-looking language such as “will likely result,” “may,” “are expected to,” “is anticipated,” “estimate,” “forecast,” “projected,” “intends to,” or may include
other similar words or phrases such as “believes,” “plans,” “trend,” “objective,” “continue,” “remain,” or similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could,” “might,”
“can,” or similar verbs. When considering these forward-looking statements, you should keep in mind these risks and uncertainties, as well as any cautionary statements we may make. Moreover, you should treat
these statements as speaking only as of the date they are made and based only on information then actually known to us. There are a number of important factors that could cause future results to differ materially
from historical performance and these forward-looking statements. Factors that might cause such a difference include, but are not limited to: (1) general economic conditions and weakening in the economy,
specifically the real estate market, either nationally or in the states in which Fifth Third, one or more acquired entities and/or the combined company do business, are less favorable than expected; (2) deteriorating
credit quality; (3) political developments, wars or other hostilities may disrupt or increase volatility in securities markets or other economic conditions; (4) changes in the interest rate environment reduce interest
margins; (5) prepayment speeds, loan origination and sale volumes, charge-offs and loan loss provisions; (6) Fifth Third’s ability to maintain required capital levels and adequate sources of funding and liquidity; (7)
maintaining capital requirements may limit Fifth Third’s operations and potential growth; (8) changes and trends in capital markets; (9) problems encountered by larger or similar financial institutions may adversely
affect the banking industry and/or Fifth Third; (10) competitive pressures among depository institutions increase significantly; (11) effects of critical accounting policies and judgments; (12) changes in accounting
policies or procedures as may be required by the Financial Accounting Standards Board (FASB) or other regulatory agencies; (13) legislative or regulatory changes or actions, or significant litigation, adversely affect
Fifth Third, one or more acquired entities and/or the combined company or the businesses in which Fifth Third, one or more acquired entities and/or the combined company are engaged, including the Dodd-
Frank Wall Street Reform and Consumer Protection Act; (14) ability to maintain favorable ratings from rating agencies; (15) fluctuation of Fifth Third’s stock price; (16) ability to attract and retain key personnel; (17)
ability to receive dividends from its subsidiaries; (18) potentially dilutive effect of future acquisitions on current shareholders’ ownership of Fifth Third; (19) effects of accounting or financial results of one or more
acquired entities; (20) difficulties from the separation of or the results of operations of Vantiv, LLC from Fifth Third; (21) loss of income from any sale or potential sale of businesses that could have an adverse
effect on Fifth Third’s earnings and future growth; (22) ability to secure confidential information and deliver products and services through the use of computer systems and telecommunications networks; and (23)
the impact of reputational risk created by these developments on such matters as business generation and retention, funding and liquidity.